India has to improve the ease of doing business for entrepreneurs and industrialists and reform the tax system to spur the creation of jobs, Infosys co-founder NR Narayana Murthy said at the Economic Times Global Business Summit.

"We have to understand that the only way we can solve the problem of poverty is through the creations of jobs by entrepreneurs and industrialists, both Indian and foreign," said Murthy, who unexpectedly stepped down as chairman of Infosys in June just a year into his comeback, Along with reducing friction for business, he said the government has to collect as much tax as possible by introducing a system that is easy to understand, easy to comply with, corruption-free and is based on rules that are fair. "It has to be a tax system based on rules that cannot be changed on a retrospective basis. That is sheer suicide for the country," he said, referring to disputes with companies such as Vodafone and Shell after the previous government changed tax rules retrospectively and in the bargain hurt India's reputation as an investment destination.

Murthy said Prime Minister Narendra Modi has addressed the basic problem of creating prosperity which is about reducing friction in doing business. "We had gone to sleep for a long time and just awoke. A sleepy mind takes time to wake up --we are seeing signs of country awakening." Murthy also emphasised the need to focus on higher education. "Skills are very, very important.

The future of this country depends on us improving our higher education systems and creating a platform for the exchange of views," he said.